Keynesian Quackery

Today’s Triangle Business Journal(subscription required) published my article responding to a prior article critical of our study revealing that the federal stimulus will actually cost roughly 67,000 North Carolina jobs.

Guest columnist and UNC Greensboro professor Andy Brod recently took issue ( Don’t listen to Civitas, Laffer, Sept. 11, 2009) with a study released by my organization, the Civitas Institute. The study concluded the federal stimulus plan will cost up to 67,000 jobs in North Carolina.

Unfortunately, the assertions Brod makes in response to the study’s conclusions are representative of some of the economic fallacies so pervasive today among politicians and academics.

Brod begins by mentioning “mainstream economists are clearly bullish” on the benefits of the federal stimulus – that should be enough to give one pause. Is he referring to the same economists who assured us that passage of the stimulus would keep the national unemployment rate, which now stands at 9.8 percent, from rising above 8 percent?

…..

An unavoidable economic reality is this: government cannot “create” jobs or wealth. Government can merely remove previously earned wealth from the economic system and divert money toward political ends.

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